microcapclub invitational: parametric sound (pamt)
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© 2013 Parametric Sound Corporation | Page 1
| Parametric Sound Corporation | Corporate Presentation
HyperSound™
© 2013 Parametric Sound Corporation | Page 2
Safe Harbor Statement All statements made in this document, other than statements of historical fact, are forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934. You should not place undue reliance on
these statements. We base these statements on particular assumptions that we have made in light of our industry
experience, the stage of product and market development, expected future developments and other factors that
we believe are appropriate under the circumstances. These forward-looking statements are based on current
expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the
industries and markets in which the Company operates. There are important factors that could cause our actual
results, level of activity, performance or achievements to differ materially from the results, level of activity,
performance or achievements expressed or implied in the forward-looking statements. These factors include, but
are not limited to, those discussed in our Annual Report on Form 10-K under Item 1A “Risk Factors,” including the
following: (a) general economic conditions, and continued difficult economic circumstances in our industry or a
reduction in spending by customers, (b) our ability to keep up with rapid technological changes, (c) the feasibility
of our new electronics processing and emitter technology for broad-based product applications, (d) our licensing
strategy to approach new markets is untested, (e) potential competitors who have greater resources and
experience than we do may develop products and technologies that make ours obsolete, and (f) our competitive
position will be seriously damaged if we cannot maintain and obtain patent protection for important differentiating
aspects of our products or otherwise protect intellectual property rights in our technology or if our products are
found to infringe on the intellectual property rights of others. As a result, there can be no assurance that the
forward-looking statements included in this presentation will prove to be accurate or correct, and actual outcomes
and results may differ materially from what is expressed or implied by the forward-looking statements. Projections
and financial illustrations are based on factors and assumptions subject to significant uncertainty and should not be
relied on as guidance as to future results and are subject to significant risk. The Company disclaims any intent or
obligation to update these or any forward-looking statements, except as required by law. Trademark Information: HSS is registered trademark of, and HyperSound ™ is a tradename of, Parametric Sound. All other trade names used herein are either trademarks or registered trademarks of the respective holders.
© 2013 Parametric Sound Corporation | Page 3
Formation
Parametric Sound incorporated June 2010 as a subsidiary of Nasdaq LRAD Corporation
Tax free spin-off completed in September 2010 (OTC:PAMT)
Institutional and management financial backing funded spin-off and digital signage product introduction
April 2012 completed $9.24 Million Secondary – Uplisted to NASDAQ
Corporate office, research lab and production facility in San Diego
© 2013 Parametric Sound Corporation | Page 4
Disruptive Technology
HyperSound – sound creation along a directional ultrasonic beam
Ultrathin form factor – matches trend and need in display technologies
Emitter technology – beams audio like a laser and immerses the listener in sound
Ability to focus sound into a beam – key to commercial applications for home entertainment, video gaming, health care, mobile devices, tablets, computers, digital signage, kiosks and slot machines
Generates a clear, distinct and robust 3D sound image from stereo content using 2 ultrathin emitters
Strong IP
© 2013 Parametric Sound Corporation | Page 5
Gaming Consoles/ Computers
Slot Machines
Healthcare
Home Theater Systems Smart Phones
Tablets
Digital Signage/
Kiosks
$4-$5 billion market
86 million tablets expected to be
sold during 2012
250 million game capable PCs sold in 2011
Over 4 million casino slot machines
214 million flat panel TVs sold in 2010
300 million smart phones sold in 2010
3 million interactive kiosks expected by
2016
400 million PCs sold each year
$68 billion video gaming market
Add Value To Large Markets
Over 36 million Americans suffer from
hearing loss
© 2013 Parametric Sound Corporation | Page 6
Marketing strategy Demonstrate technology in easy to access markets Identify and pursue worldwide leaders in each product category
Licensing strategy Engage worldwide category leaders through NDA’s
> 20 NDA’s signed with strategic business prospects
Leverage early prototypes to create co-development projects to demonstrate disruptive attributes Early stage of co-development with multiple parties
License and support key OEMs and VARs Time advantage licenses targeted
Manufacturing strategy Low volume in-house manufacturing now established High volume manufacturing to be established with strategic
partners
Revenue Strategy
© 2013 Parametric Sound Corporation | Page 7
IP Strategy – Partner and License
FY 2012 Improved HSS Directed Audio
System
Digital Signage
Interactive Kiosks
FY 2013 Healthcare
Personal Sound
Amplification
Assisted Listening Devices
Targeted Medical
Applications
FY 2013-2014 Mobile Devices
PDAs and Smart Phones
Tablets
FY 2013 Entertainment
and Casino Gaming
Computers & Video Gaming
TVs & Home Theater
Multimedia Devices
Slot Machines
Product Sales – Integrators & Partners
Growth Plan
© 2013 Parametric Sound Corporation | Page 8
Early on, Dolby decided the company would generate revenue by licensing technologies to original equipment manufacturers (“OEM”) of consumer entertainment products and software vendors.
Market Cap: $3.1 B Total Rev (FY’12): $926M Ave Vol (3 m): 861M Gross Profit (FY’12): $834M 52 wk Range: $28.66-$45.83 Gross Profit % 90%
Licensing revenue constitutes the majority of Dolby’s total revenue.
Through a wholly owned subsidiary, Via Licensing Corporation, Dolby administers joint patent licensing programs, or patent pools, on behalf of third party patent owners. Some of the patent pools also include Dolby patents.
Case Study - Dolby
BUSINESS STRATEGY
FINANCIAL SUMMARY
IP STRATEGY 2010 2011 2012
Licensing Revenue $710M $790M $795M
% of Total Revenue 77% 83% 86%
© 2013 Parametric Sound Corporation | Page 9
BUSINESS STRATEGY
FINANCIAL SUMMARY
IP STRATEGY
Technology Licensing – Universal Display’s primary business strategy is technology licensing. With over 1000 issued and pending patents worldwide, the goal is to enable OLED manufacturers to produce high-performance products with enhanced product features and competitive advantage using a broad portfolio of OLED technologies.
Market Cap: $1.3 B 52 wk Range: $21.55 -$48.07 Total Rev (FY’11): $61.2M P/E: 134
Licensing revenue constitutes the majority of Universal Display revenue.
Universal Display Corporation is a world leader in the development of state-of-the-art OLED technology for use in flat panel displays, lighting and organic electronics.
Case Study - Universal Display
© 2013 Parametric Sound Corporation | Page 10
Competition
Limited competition in directional sound space Panphonics (Sound Shower – Traditional
Speaker) Holosonic Research Labs (Audio Spotlight) Brown Innovations (Sound Domes)
Economical technology for vast consumer markets
Other companies tried to commercialize this technology but failed
Sound quality and high manufacturing cost prevented entry to market
© 2013 Parametric Sound Corporation | Page 11
Strong IP
Pioneered directed audio Technology leader 23 U.S. patents, 2 foreign and 10 pending plus
related foreign patents pending Additional patent filings targeted for 2013 Fundamental IP makes “knock-offs” difficult Strong IP supports licensing for volume markets Recent IP development –
New patented technology implemented creating consumer quality sound
Implemented simplified economical electronic design New emitter technology enables ultrathin and economical emitters
© 2013 Parametric Sound Corporation | Page 12
Development Roadmap
Markets Current
HSS-3000 Product
Emitter Form Factor &
Industrial Design
Electronics Reduction/ Emitter & Industrial
Design
Custom Chip/ Modified Emitter Design
Digital Signage & Kiosks X
Mass Kiosk Mkt/Slot Machines/POS X
Multimedia/TVs/ Home Theater X
Personal Computers/ Video Gaming
X
Healthcare X X Mobile Devices X Movies and Cinema X X
© 2013 Parametric Sound Corporation | Page 13
Capitalization (9/30/12)
Shares Outstanding 6,408,151
Warrants 525,339 Weighted average strike price $4.48
Options - Vested 608,771 Weighted average strike price $2.90
Options – Total 1.17 million Weighted average strike price $3.93
Institutional Ownership 24%
Management Ownership 27%
© 2013 Parametric Sound Corporation | Page 14
Recent Developments
Completed $9.24M secondary offering- $8.0M net proceeds Uplisted to NASDAQ Capital Market Kenneth Potashner – Assumed Operations as Executive Chairman in
March 2012 Identified health care as new market with significant opportunity
Reviewing technology with industry professionals Consumer preference testing very encouraging Developing product and regulatory roadmap
Executed a License Agreement with Epsilon Electronics for specific agreed consumer products
Added business development and engineering staff Expanded distribution channels for digital signage sales Consolidating corporate, production and engineering in new 7,000
square foot location in San Diego Separate inventions lab focused on new innovations
© 2013 Parametric Sound Corporation | Page 15
Product Licensing Target Examples Home entertainment – 3D
Flat panel TV speakers Sound bars Home audio systems Portable audio
Computer gaming – 3D Playstation / Xbox / Nintendo type gaming 2.1 system for PCs
Health care – clarity of HyperSound Personal sound amplification Assisted listening devices Targeted medical applications
Other - directionality Automobile / cinema and many more
© 2013 Parametric Sound Corporation | Page 16
Financial Information (September 30, 2012)
Amount Cash and cash equivalents $5,528,000 Working capital 5,760,000 Total assets 7,565,000 Stockholders’ equity 7,252,000
© 2013 Parametric Sound Corporation | Page 17
Ken Potashner – Accomplished Leader
Kenneth Potashner – Executive Chairman Extensive executive and BOD level experience leading
high growth, high technology global organizations Chairman of Board
Newport Corporation (Present) – An industry leader in the photonics sector with 2011 revenues projected to exceed $500M
Maxwell Technologies from (1996 - 2003) Sonic Blue, Inc. (1998 - 2002)
© 2013 Parametric Sound Corporation | Page 18
W. Norris - Accomplished Inventor
Elwood Norris – President is original inventor of HyperSound technology
Winner of the 2005 Lemelson-MIT $500,000 prize for revolutionizing acoustics
Norris has been inventing for more than 30 years 46 patents granted; other pending patents Popular Science – 2002 Grand Award
Record of successful inventions Earphone technology later evolved into the JABRA headsets Doppler tool evolved into the sonogram Patriot’s GPR resulted in major chip innovations/licensing e.Digital’s flash memory technology now used in cameras and
computers worldwide/ licensing major consumer product companies
© 2013 Parametric Sound Corporation | Page 19
Management and Directors
Kenneth F. Potashner Executive Chairman
Elwood G. Norris President and Founder
James A. Barnes CFO, Treasurer, Secretary and Founder
Dr. Seth Putterman Independent Director UCLA Professor of Physics
Dr. Robert Kaplan Independent Director Extensive financial experience
Dr. Andrew Wolfe Independent Director Recognized IP expert
James L. Honore Retired EVP Sony Pictures Entertainment
© 2013 Parametric Sound Corporation | Page 20
Summary – Key Points
Parametric Sound is pioneering industry leader Mission is to dominate a fundamental new way of producing
sound across commercial and consumer markets worldwide
Strong IP – a disruptive technology Like lasers changed how light is used – HyperSound
changes how sound is used Broad range of product applications Large growing worldwide markets
Experienced executive management Limited competition – strong barriers to entry Clearly definable progress
Goal of 2-3 significant licenses by April 2013 Launch of health subsidiary
© 2013 Parametric Sound Corporation | Page 21
| Parametric Sound Corporation | (888) HSS-2150 www.parametricsound.com
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